London - Here's a conundrum to ponder after International Women's Day: how do we balance the desire to increase the number of women who start their own businesses with evidence showing that policies aimed at specifically encouraging female entrepreneurship may actually put many off doing so?
There is certainly a problem to tackle here. Government statistics suggest that fewer than one in five smaller companies are led by women. That's not enough - not just because social justice demands equality of opportunity, though of course it does, but also because there is every reason to expect women-led companies to outperform. At larger companies, there is overwhelming evidence that getting more women into senior positions leads to superior performance, and an increasing number of studies suggest that the same is true of smaller companies. Research published last week by the business software group Xero, for example, found that women-led start-ups tend, on average, to lose less money and have more success in winning new contracts.
How, then, to get more women small business leaders? Well, the typical answers to this question centre on better support structures for women - think mentorship and networking, for example - as well as policies that address some of the practical problems that have tended to hold women back, such as issues around childcare provision and flexible working.
However, there's a problem with that approach; if one of the reasons women aren't starting businesses is because they lack the confidence to do so, singling them out as a group in need of special treatment risks undermining that confidence even further.
In fact, of the women surveyed in Xero's research, a third said a lack of self-belief had been the biggest barrier standing in the way of them launching their small business, the single reason most often given. This is a well-documented trend: all the academic evidence suggests that women are far more likely to suffer from “imposter syndrome” than men. This is the condition where people attribute their success in life as being down to luck, rather than their own intelligence and hard work. Sufferers routinely feel as if they have deceived people into thinking highly of them.
The problem with imposter syndrome is that it's very difficult to attack. Praising people suffering in this way reinforces their self-doubt - tell someone they really do deserve their success and they end up feeling even more fraudulent. Also, many of the policies advocated to encourage more women into taking on high-achieving roles can fuel the syndrome - the danger is that women begin to feel they've made it because of positive discrimination, rather than on their own merits.
None of which is to say that policymakers should not be thinking hard about how to boost the number of women who start their own businesses, or that the initiatives and policies adopted thus far should be abandoned. It is simply a warning that this may be a far thornier problem than it might first appear - and one that it is not possible to tackle solely with traditional socioeconomic policies.
It's also worth making the point that some of the factors that play a part in women's disposition towards imposter syndrome may also be part of the explanation for why they so often make better business leaders. At the risk of slipping into easy stereotypes, men are encouraged from an early age to bluff it out - to take the lead, even where they are ill-equipped to do so, rather than to seek consensus and build mutually beneficial relationships. They're more likely to be poor listeners and to make hasty decisions. None of these are qualities to be encouraged in someone who is trying to build a small business with the potential to deliver sustainable growth.
Finally, there is one other piece of evidence that stands out in the argument over whether women make better entrepreneurs than men. A recent Goldman Sachs report into 10 000 small businesses found that women bosses paid themselves just 80 percent of the salaries their male counterparts were enjoying. In a conclusion befitting an investment bank, Goldman declared this was because women needed to develop the confidence to value their own time more highly: might an alternative thesis be that women prefer to channel profit back into their business, in order to build a more valuable enterprise over the long term?
The Independent